China Has Our Military Secrets

Panel Blames U.s. Companies

December 31, 1998|By Art Pine Los Angeles Times

WASHINGTON - A special House investigative committee has found evidence that American companies have transferred militarily useful technology to China during the past several years, some of which has damaged U.S. national security.

Rep. Chris Cox, R-Calif., the panel's chairman, said Wednesday the six-month investigation determined that alleged breaches of U.S. export guidelines by Hughes Space & Communications and Loral Space & Communications in 1995 had harmed national security.

But he said the leakage ``goes beyond'' the incidents involving those companies to even wider transfers of technology by American companies, involving not only civilian satellite launchings but missiles and other militarily important know-how.

He said the panel also has amassed evidence that China carried on a ``serious and sustained'' effort to acquire militarily useful U.S. technology for at least two decades. That campaign, he asserted, ``continues to the present day.''

Neither Cox nor others on the nine-member bipartisan Select Committee on the Peoples Republic of China Technology Transfers would provide any specifics on their findings or recommendations for fear that they might inadvertently disclose classified information. The committee will publish an unclassified version of its report within a few weeks.

But the panel said it had made 38 separate recommendations - presumably for tightening existing restrictions on technology transfer to China - to be carried out either by executive order or through legislation to be proposed in the 106th Congress.

Although details were not available, analysts speculated that the changes could have a tangible impact on efforts by U.S. companies to do business in China. In addition, the committee's recommendations are considered likely to anger the Chinese government.

U.S. industry is expected to mount a heavy lobbying campaign to limit any tightening of restrictions. High-technology companies have been major contributors both to the presidential campaigns and in congressional elections.

Both Cox and Rep. Norman D. Dicks, D-Wash., ranking Democrat on the panel, repeatedly stressed the bipartisan support within the committee for the findings. Dicks called the 700-page report, which was approved unanimously, ``a solid, bipartisan product.''

Dicks said the White House had been kept informed about the panel's investigation, and that the administration has pledged that it will ``carefully consider implementing'' the committee's recommendations, some of which can be done by presidential order.

In the partisan climate, winning bipartisan agreement ``isn't easy to do,'' Dicks told reporters at a joint news conference with Cox and other panel members. The committee has five Republicans and four Democrats.

The two men brushed aside questions about whether the panel had found that campaign contributions from Chinese nationals or U.S. satellite makers to Democratic campaign committees had influenced the administration's handling of the technology transfer issue.

Cox said these matters and others would be addressed when the report is made public.

Although both companies have said they have done nothing wrong, critics have alleged that the U.S. manufacturers might have inadvertently helped bolster Chinese military capabilities by helping the Chinese make their rockets more reliable.

The incidents in 1995 involved a post-crash review that the companies conducted for an insurance company. Critics say a copy of the resulting report supposedly was sent to the Chinese government without first having been cleared by the State Department.

The Cox committee was established last June in part to investigate those incidents and given until Jan. 3 to complete its probe. Cox said the panel will file the classified version of its report with the House speaker and the White House on Saturday.

Cox told reporters that a thorough probe of the affair by his panel's investigators showed that ``national security harm did occur,'' but he would not provide any details until the panel has prepared a declassified version of its report.

Loral officials issued a statement saying they ``remain convinced that we did not violate the law and did nothing to harm national security.'' They said any material sent to China ``was from open sources, readily available in standard engineering textbooks.''

A spokesman for Hughes said the company had not seen the committee's conclusions but noted that the company's internal investigation confirmed it was following applicable government regulations. Hughes found ``nothing that would indicate any breach of national security,'' he said.